The gold price is seeking a support from a seasonally favorable time starting mid-December. And strategists are watching if the momentum will be strong enough to push the gold above $1,850. Here are the gold forecasts and market analyzes of Walsh Trading co-director Sean Lusk and RJO Futures senior market strategist Frank Cholly, cryptocoin.com We have prepared for our readers.
“Aggressive tapering program and three rate hikes in 2022 largely priced in”
From a seasonal perspective, demand for physical gold has been a big help in pushing prices up from mid-December to Valentine’s Day, says Walsh Trading co-director Sean Lusk. The director comments:
Gold and silver may develop over the next 6-8 weeks. With the arrival of the new variant, easy money policies will remain. It was accepted, the Fed signaled that they would start increasing interest rates. However, there is still a lot of uncertainty between the global economic recovery and new geopolitical tensions.
Sean Lusk notes that for this reason, gold remains in the $1,780-1,800 range. The Federal Reserve’s more aggressive tapering program and the potential for three rate hikes in 2022 are already heavily priced in. According to Sean Lusk, this means that any new fears can change the look and benefit the gold:
The trend is rising towards next year. It looks like the new Covid-19 variant could give the Fed more pause in aggressive tapering and rate hikes. Geopolitical risks or the crude oil cut may affect the perceptions of the markets.
Sean Lusk’s gold predictions: If he closes the year at $1,850, the next target is $2,000
Frank Cholly, senior market strategist at RJO Futures, warns that before taking positions one way or another, investors should make sure that the current bullish move in gold isn’t a head scam:
The gold market continues to imitate these heads. It explodes and clumps, but then the movement quickly fades. I can’t get too excited about gold until it hits $1,835, maybe even $1,850.
From a technical point of view, Sean Lusk states that the funds do not have a strong long position in gold that will enter next year and this may be changing. Gold could challenge the $1,880 level, last seen in mid-November, according to the strategist. Sean Lusk explains:
Head and shoulders may be forming and we can start shooting higher. We’re getting higher lows. This ultimately leads to higher peaks. In the near term, there could be an increase to $1,815 in the February contract. If we get past that, we’ll be sailing up to $1,833 and then $1,875. If gold manages to close the year at $1,850, the next target will be around $2,000.
Frank Cholly gold predictions: Resistance way higher for gold above $1,850
According to Frank Cholly, who stated that he will direct the gold price in 2022, since real interest rates remained low despite the Fed’s rate hikes, problematic inflation will finally come into play and will be one of the macro drivers that will help prices rise in 2022:
This will be a point where gold will start to rise from the idea that inflation is heating up. As we enter the first quarter of 2022, we will see more price pressure. And once gold climbs above $1,850 this time, the resistance path will be higher.
Frank Cholly adds that if gold comfortably climbs above $1,850, more people will jump into fear of losing it. While the initial reaction to the Fed’s tapering and higher interest rates was negative for gold, it could trigger another rally once it’s processed, according to the strategist:
Generally, higher interest rates mean a stronger dollar. But the Fed’s tightening cycle in 2022 could be bullish for gold. This may not be the first reaction, but gold will be in demand as inflation hits all other commodities. When prices rise, most commodities see a brake on demand. For gold, this creates demand for fear of missing out. The inflation protection narrative is something people want.
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